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This research investigates the paradox of increasing self-employment in India alongside stagnant job creation and widening income inequality.

July 10, 2026Cogent Social SciencesOpen Access

The self-employment paradox in India: growing numbers, declining returns and deepening inequality

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Examines self-employment and its impact on income inequality in India, suggesting systemic issues contribute to wage disparities.

This research investigates the paradox of increasing self-employment in India alongside stagnant job creation and widening income inequality.
Analyzed four rounds of Employment-Unemployment Survey and Periodic Labour Force Survey data (2004–2024)
Examined the growth of non-agricultural self-employment and its impact on earnings and inequality
Applied decomposition analysis to assess factors influencing income disparity
Rural non-agricultural self-employment increased from 50.9 million in 2004 to 100 million in 2024
Real earnings for self-employed workers are consistently lower than those for regular workers across key sectors
The Theil T index rose from 0.316 to 0.333, indicating deepening inequality in self-employment

Singh et al. (2026) studied this question.

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